The average need can reach 10 - 11 million metric tons per month
Jakarta (ANTARA) - The Indonesian government will allocate 127.1 million metric tons of coal to meet the demand from steam power plants (PLTU) in 2022.

Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif said the steam power plant (PLTU) owned by PLN will require 64.2 million metric tons of coal. Meanwhile, the PLTU owned by independent power producer (IPP) or private companies, will require as much as 62.9 million metric tons of coal, he added.

"The average need can reach 10 - 11 million metric tons per month," said the minister during a working meeting with Commission VII of the Indonesian House of Representatives here on Thursday.

The government is implementing Domestic Market Obligation (DMO), which requires companies to fulfill the provision on allocating a percentage of sales for domestic needs, to ensure the availability of coal for power plants, he explained.

Tasrif emphasized that the DMO obligation applies to all coal mining companies operating in Indonesia, and has been set at 25 percent of the production volume.

Companies that cannot fulfill the DMO or sales contracts will be subject to sanctions such as export bans and fines, he said.

"A special price for DMO coal that has been set for power generation needs refers to the reference coal price (HBA), which is US$70 per metric ton," the minister said.

In 2022, the government is targeting total coal production of 663 million tons, with a DMO plan of 166 million tons. Meanwhile, the realization of coal production until January 2022 has been recorded at 34 million tons, with a total DMO of 13 million tons.

By 2025, the allocation of domestic coal needs will increase from 166 million tons in 2022 to 208 million tons in 2025.

The increase in coal demand is to meet the fuel needs for power plants, mineral processing and refining industry, fertilizer industry, cement industry, textile industry, paper industry, chemical industry, as well as coal downstreaming.

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Translator: Katriana
Editor: Sri Haryati
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